Yahoo could be interested in scooping up a cable network

Yahoo, angling to remake itself in an increasingly mobile world, could be considering a bold deal to buy news network CNN, or another major cable network.

Media reports are beginning to swirl around the idea that Yahoo YHOO CEO Marissa Mayer is possibly on the hunt to acquire a media property, such as Scripps Networks Interactive SNI, or possibly Time Warner’s TWX CNN. Renewed speculation kicked off at the end of 2014 with a piece by The Information’s Tom Dotan entitled “Why I’m betting on a Yahoo-CNN marriage.” Business Insider followed up with a story that said two sources, former employees at Yahoo, told the publication that Yahoo considered a deal for Scripps during a period of time when Mayer and other executives thought Yahoo would have billions to spend following the initial public offering of Alibaba BABA, a company Yahoo had held a stake in for years.

Any deal could come at a steep cost. Business Insider, which reported on rumors of a CNN acquisition, speculates that buying the news network would cost Yahoo between $5 billion and $6 billion, according to a source. Meanwhile, the market capitalization of Scripps Networks is at about $10 billion today, so it would likely cost even more to buy the owner of the Food Network, Home and Garden Television, and other lifestyle-focused channels.

A Yahoo representative declined to comment, citing a company policy not to address speculative reports.

Speculation of another deal inked by Yahoo’s Mayer might not impress some shareholders. Starboard Value LP, which disclosed a “significant ownership stake” in September, has argued that Yahoo should halt its “aggressive acquisition strategy” that has resulted in over a billion of capital spending since 2012 while overall consolidated revenue remains stagnant. Instead, Starboard has argued that Yahoo should consider a combination with AOL AOL.

Yahoo has aggressively touted its efforts in video, so a potential cable channel buy doesn’t seem too far-fetched. The company has hired Katie Couric, for example, as its global news anchor in one of many moves meant to boost online video traffic. But that move is to tap the online video-watching audience, which reached more than 191 million Americans via desktop computers in October. Yahoo’s share of that audience is a little over 57 million, good enough for fourth place behind Google GOOG, Facebook FB and AOL.

While Scripps Networks and CNN are both in the cable business, they are two very different assets. Scripps would cost significantly more, but comes with some favorable ad trends. Total revenue is up 6.4% for the first nine months of 2014, as the company has reported consistent gains in ad and affiliate fee revenue growth. CNN, meanwhile, has seen its viewer traffic ebb. CNN’s ratings are lower than ever, according to a recent post by Mediaite.